This bill amends the local payroll tax law in New Jersey, allowing municipalities to impose and collect an employer payroll tax for general municipal purposes at a rate of up to one percent of the employer's payroll. Notably, municipalities can now elect to retain up to three percent of the collected payroll tax annually to cover administrative costs related to the tax. Additionally, if an out-of-State municipality imposes a payroll tax on a New Jersey resident employee, the local payroll tax will not apply to that employee. The bill also mandates that certain employers provide additional information to assist municipalities in administering the local tax.

Furthermore, the bill enhances the authority of the Director of the Division of Taxation to disclose wage and tax withholding information to municipalities for two specific purposes: verifying payroll information reported by employers and identifying employers that have not reported payroll information for a preceding quarter. This change removes the previous discretion of the Director regarding such disclosures. The bill also includes a provision that ensures confidentiality of taxpayer information while allowing for necessary disclosures to facilitate the administration of the employer payroll tax.

Statutes affected:
Introduced: 40:48C-15, 40:48C-16, 40:48C-18